Social Security Survivors Benefits - whats the small print

[halfnine]

I am trying to get a better handle on the Social Security Survivors Benefits. My situation is a little bit unique and I want to ensure what the actual benefits would be, if any, for my spouse and children. So..

- I am a US citizen
- have more than 40 credits
- have paid less than 35 years in social security taxes
- have a basic understanding of social security benefits although things may have changed in the last few years (monthly benefit calculated on the average inflation adjusted best 35 years of income multiplied by the 90%, 32% and 15% multipliers accordingly).

Now what is unique about my situation is:
- spouse is not a US citizen nor a US resident and is unlikely ever to become so
- children might not become US citizens, might become US citizens while I am alive, or might become US citizens after I am deceased.
- unlikely I will return to the USA or pay another dime of social security taxes
- also very unlikely that I would ever renounce my US citizenship (but I've also learned to never say never)

That said, there are three main issues I am trying to wrap my head around.

The first issue is how the survivorship benefit is actually calculated. Do they take the average 35 years as I've indicated above recognizing that there would likely be a lot of zero income years between death and retirement which obviously punishes those who die sooner over those who die later? Or do they base it on projected earnings (based on previous earnings) over ones working lifetime similar to what one would receive in a yearly statement. Which then in my case means every year I do not contribute to social security the survivorship benefit would decrease as my projected social security contributions/taxes would decrease. Or is there actually another method in which they calculate survivorship benefits.

The second issue is simply whether there is any fine print that would eliminate my wife or children from receiving any benefits based on their residency/citizenship status

The third issue is how they determine the maximum family amount. I've seen it indicated that it would be between 150-180 percent of the deceased's benefit amount but I would like to know how the value is determined. I do understand that:

- A widow or widower, at full retirement age or older, generally receives 100 percent of the worker’s basic benefit amount
- A widow or widower, age 60 or older, but under full retirement age, receives about 71-99 percent of the worker’s basic benefit amount;
- A widow or widower, any age, with a child younger than age 16, receives 75 percent of the worker’s benefit amount
- Children receive 75 percent of the worker’s benefit amount
- Earnings can reduce or eliminate the amount of benefit available

[Professor Emeritus]

Once an alien worker has met eligibility criteria, we must have evidence of the lawful presence of the beneficiary. That means before we can pay out benefits for any given month, we must have evidence during that month the beneficiary was either:

A United States citizen;
A United States national; or
An alien lawfully present in the United States.
http://ssa-custhelp.ssa.gov/app/answers ... /related/1

[sscritic]

The first issue is how the survivorship benefit is actually calculated. Do they take the average 35 years as I've indicated above recognizing that there would likely be a lot of zero income years between death and retirement which obviously punishes those who die sooner over those who die later? Or do they base it on projected earnings (based on previous earnings) over ones working lifetime similar to what one would receive in a yearly statement. Which then in my case means every year I do not contribute to social security the survivorship benefit would decrease as my projected social security contributions/taxes would decrease. Or is there actually another method in which they calculate survivorship benefits.

One issue at a time. They calculate your PIA (Primary Insurance Amount) differently. If you die at age 37, they will not assume you worked or will work for 35 years (you didn't and you won't). Your survivor benefits are based on your PIA.

Number of years to be considered in finding your average indexed monthly earnings. To find the number of years to be used in computing your average indexed monthly earnings—
(1) We count the years beginning with 1951, or (if later) the year you reach age 22, and ending with the earliest of the year before you reach age 62, become disabled, or die. Years wholly or partially within a period of disability (as defined in § 404.1501(b) of subpart P of this part) are not counted unless your primary insurance amount would be higher. In that case, we count all the years during the period of disability, even though you had no earnings in some of those years. These are your elapsed years. From your elapsed years, we then subtract up to 5 years, the exact number depending on the kind of benefits to which you are entitled. You cannot, under this procedure, have fewer than 2 benefit computation years.
(2) For computing old-age insurance benefits and survivors insurance benefits, we subtract 5 from the number of your elapsed years.

http://www.socialsecurity.gov/OP_Home/c ... 4-0211.htm

If you live from 22 to the year before you reach 62, you have 40 years. Subtract 5 and you get 35. That's the 35 year rule. If you live from 22 to 37, you have 15 years (stop the year before you die). Subtract 5 and you get 10. They will use your best 10 years. Living past 37 without paying into SS or dying will decrease your PIA. More details at the close to unreadable link.

[sscritic]

Once an alien worker has met eligibility criteria, we must have evidence of the lawful presence of the beneficiary. That means before we can pay out benefits for any given month, we must have evidence during that month the beneficiary was either:

A United States citizen;
A United States national; or
An alien lawfully present in the United States.
http://ssa-custhelp.ssa.gov/app/answers ... /related/1

This is not complete. See a previous thread on alien beneficiaries and the exceptions. There is a 10 year rule and a 5 year rule (neither of which will apply to the OP's survivor as I understand it).

[sscritic]

- children might not become US citizens, might become US citizens while I am alive, or might become US citizens after I am deceased.

Were you born outside the US? Natural children of citizens are citizens, but that stops after one generation as I recall. I know more social security than I know citizenship. I do know a little google.

A child born abroad to one U.S. citizen parent and one alien parent acquires U.S. citizenship at birth under Section 301(g) of the INA provided the U.S. citizen parent was physically present in the United States or one of its outlying possessions for the time period required by the law applicable at the time of the child's birth. (For birth on or after November 14, 1986, a period of five years physical presence, two after the age of fourteen, is required.

http://travel.state.gov/law/citizenship ... _5199.html

Did you leave the US at age 15?

[MathWizard]

The first issue is how the survivorship benefit is actually calculated. Do they take the average 35 years as I've indicated above recognizing that there would likely be a lot of zero income years between death and retirement which obviously punishes those who die sooner over those who die later? Or do they base it on projected earnings (based on previous earnings) over ones working lifetime similar to what one would receive in a yearly statement. Which then in my case means every year I do not contribute to social security the survivorship benefit would decrease as my projected social security contributions/taxes would decrease.

Since you have fewer than 35 years of earnings, and assuming that the shorter term fro sscritic's posts
does not apply, they will use the 35 best years of INDEXED earnings to calculate your PIA. F you is going to
include some zero income years. The INDEXING adjusts your earnings to reflect the fact that inflation has
occurred. The index (weighting) factors change every year, to reflect that year's wage inflation.
From reading my statements, they use the last year
s SS earnings to project your future constributions. If last year's SS earnings were zero,
then my guess would be that they are using 0 as the projected contributions. This should
be on your SS statement of benefits.

You can get these index factors from http://www.ssa.gov/oact/COLA/awifactors.html

For example, assuming you were born in 1947, you would reach full ret. age in 2013.
Getting the factor for that year, you would see that any wages you earned in
1977 would be multiplied by the index factor 4.3948948 before the comparison was made.

When the project into the future, my statements alwasy read that they were assuming that
I continued to make the last year's SS earnings until I reached FRA. They also use projected
index factors. Obviously there is some uncertainty there since they do not know the exact
wage inflation figures.

I have been making my own calculations using the index factors from 2 years ago and assuming real
2010 dollars to keep things simple.

[sscritic]

Since you have fewer than 35 years of earnings, and assuming that the shorter term fro sscritic's posts
does not apply, they will use the 35 best years of INDEXED earnings to calculate your PIA.

Since he didn't say he was 62 or that he was positive he would not die before 62, assuming that he will live to 62 is indeed an assumption. A person 37 can have a wife and children, and a person 37 can die. My wife died at 49, and my son got survivor benefits based on her PIA calculated as I indicated. But given your assumption that he is or will live to 62, yes to the rest of what you wrote.

P.S. and the limited number of years are also indexed, just as they would be if you had 35.

[halfnine]

- children might not become US citizens, might become US citizens while I am alive, or might become US citizens after I am deceased.

Were you born outside the US? Natural children of citizens are citizens, but that stops after one generation as I recall. I know more social security than I know citizenship. I do know a little google.

A child born abroad to one U.S. citizen parent and one alien parent acquires U.S. citizenship at birth under Section 301(g) of the INA provided the U.S. citizen parent was physically present in the United States or one of its outlying possessions for the time period required by the law applicable at the time of the child's birth. (For birth on or after November 14, 1986, a period of five years physical presence, two after the age of fourteen, is required.

http://travel.state.gov/law/citizenship ... _5199.html

Did you leave the US at age 15?

I have previously looked into the citizenship option for my children and am confident that based on my personal scenario and current law that they are eligible for US citizenship at any point. A trip to the embassy with the correct documentation and they would be granted citizenship with the documentation following most likely within a month or two.

[halfnine]

Once an alien worker has met eligibility criteria, we must have evidence of the lawful presence of the beneficiary. That means before we can pay out benefits for any given month, we must have evidence during that month the beneficiary was either:

A United States citizen;
A United States national; or
An alien lawfully present in the United States.
http://ssa-custhelp.ssa.gov/app/answers ... /related/1

This is not complete. See a previous thread on alien beneficiaries and the exceptions. There is a 10 year rule and a 5 year rule (neither of which will apply to the OP's survivor as I understand it).

So, from what I gather, based on my wife's current and expected residency/citizenship circumstances she won't qualify to receive any form of social security benefits as my beneficiary. However, strictly from a residency/citizenship status, if my children elect US citizenship then they would be eligible for survivorship benefits from the month their US citizenship begins. Now, I read through a bit of the links and nothing directly popped out, but is there a time limit in claiming survivorship benefits. Does it need to be done immediately after one's death or can it be done at any time up until the children would no longer qualify due to age limits?

[halfnine]

The first issue is how the survivorship benefit is actually calculated. Do they take the average 35 years as I've indicated above recognizing that there would likely be a lot of zero income years between death and retirement which obviously punishes those who die sooner over those who die later? Or do they base it on projected earnings (based on previous earnings) over ones working lifetime similar to what one would receive in a yearly statement. Which then in my case means every year I do not contribute to social security the survivorship benefit would decrease as my projected social security contributions/taxes would decrease. Or is there actually another method in which they calculate survivorship benefits.

One issue at a time. They calculate your PIA (Primary Insurance Amount) differently. If you die at age 37, they will not assume you worked or will work for 35 years (you didn't and you won't). Your survivor benefits are based on your PIA.

Number of years to be considered in finding your average indexed monthly earnings. To find the number of years to be used in computing your average indexed monthly earnings—
(1) We count the years beginning with 1951, or (if later) the year you reach age 22, and ending with the earliest of the year before you reach age 62, become disabled, or die. Years wholly or partially within a period of disability (as defined in § 404.1501(b) of subpart P of this part) are not counted unless your primary insurance amount would be higher. In that case, we count all the years during the period of disability, even though you had no earnings in some of those years. These are your elapsed years. From your elapsed years, we then subtract up to 5 years, the exact number depending on the kind of benefits to which you are entitled. You cannot, under this procedure, have fewer than 2 benefit computation years.
(2) For computing old-age insurance benefits and survivors insurance benefits, we subtract 5 from the number of your elapsed years.

http://www.socialsecurity.gov/OP_Home/c ... 4-0211.htm

If you live from 22 to the year before you reach 62, you have 40 years. Subtract 5 and you get 35. That's the 35 year rule. If you live from 22 to 37, you have 15 years (stop the year before you die). Subtract 5 and you get 10. They will use your best 10 years. Living past 37 without paying into SS or dying will decrease your PIA. More details at the close to unreadable link.

I had assumed that the survivorship benefits would be calculated something along those lines. So, for instance if I passed on at 42 I would have 20 elapsed years. Subtracting 5 years from that, I would then end up with 15 benefit computation years. Accordingly, each year I live and don't contribute to SS the survivorship benefits would decrease. Since I am in the 15% multiplier range, then in the beginning the decrease won't be all that much (around 1% or so). But as the years go on that will change as I add more zero income years and eventually I'd end up in the 32% multiplier zone as well.

[sscritic]

I have previously looked into the citizenship option for my children and am confident that based on my personal scenario and current law that they are eligible for US citizenship at any point. A trip to the embassy with the correct documentation and they would be granted citizenship with the documentation following most likely within a month or two.

You may well know more than I, but I like googling.

Consular Report of Birth Abroad (FS-240)

The birth of a child abroad to U.S. citizen parent(s) should be reported as soon as possible so that a Consular Report of Birth Abroad can be issued as an official record of the child’s claim to U.S. citizenship. Report the birth of your child abroad at the nearest U.S. embassy or consulate.

A Consular Report of Birth can only be created at an American consular office overseas while the child is under age 18
...
The Consular Report of Birth and the Certificate of Citizenship are equally acceptable as proof of U.S. citizenship.

http://travel.state.gov/law/family_issu ... h_593.html

Does that mean you can do it at an Embassy, but not a consular office, when the child is 25? I keep running into a stone wall. Everything says 18. After 18, it looks like you have to be naturalized. The trouble is that every documents talks about a child born outside the US, not an adult born outside the US. Now that may just be language (how is an adult born?), but I keep hitting 18. For example, see Children Born Outside the United States; Applications for Certificate of Citizenship; Final Rule and Notice

Second, this rule also addresses application procedures for foreign-born children residing outside of the United States, who can acquire citizenship under section 322 of the Act, as amended, by approval of an application and taking of the oath of allegiance.
...
Foreign-born children who are residing outside of the United States will acquire citizenship on approval of an application for a certificate of citizenship and taking of the oath of allegiance, unless the oath is waived in accordance with section 337(a) of the Act. The Service will issue a certificate of citizenship if the following conditions have been fulfilled:

(1) The child has at least one United States citizen parent (by birth or naturalization);

(2) The United States citizen parent has been physically present in the United States or its outlying possessions for at least 5 years, at least 2 of which were after the age of 14, or the United States citizen parent has a citizen parent who has been physically present in the United States or its outlying possessions for at least 5 years, at least 2 of which were after the age of 14;

(3) The child currently is under 18 years of age;

(4) The child currently is residing outside the United States in the legal and physical custody of the United States citizen parent; and

(5) The child is temporarily present in the United States pursuant to a lawful admission and is maintaining such lawful status in the United States.

http://www.uscis.gov/ilink/docView/FR/H ... 74195.html
(5) is the "you have to bring them to the US" rule that I have read about. Note that this is for a Certificate of Citizenship, not a Consular Report of Birth.

Somehow "A trip to the embassy with the correct documentation and they would be granted citizenship with the documentation following most likely within a month or two" doesn't sound like the US government in action.

I am having trouble reconciling 8 USC 1433 (naturalization - rules as quoted above) with 8 USC 1401(g) (at birth).

http://www.law.cornell.edu/uscode/text/8/1401
http://www.law.cornell.edu/uscode/text/8/1433

Enough of my googling; back to SS.

[sscritic]

So, from what I gather, based on my wife's current and expected residency/citizenship circumstances she won't qualify to receive any form of social security benefits as my beneficiary. However, strictly from a residency/citizenship status, if my children elect US citizenship then they would be eligible for survivorship benefits from the month their US citizenship begins. Now, I read through a bit of the links and nothing directly popped out, but is there a time limit in claiming survivorship benefits. Does it need to be done immediately after one's death or can it be done at any time up until the children would no longer qualify due to age limits?

There is no time limit. Consider if your wife were a citizen. When you die, and if she is otherwise eligible (age 60, if not disabled), she can wait until full retirement age in order to get unreduced widow's benefits. There is no apply now or lose it provision. Well, you are losing it; they won't be collecting the benefits they are entitled to. I believe they also need a social security number, although they may get that when they become citizens (I am still dubious of the turn around time).

If your status changes from… Not lawfully present in the United States
To…United States citizen or United States national,
And you… Obtain United States citizenship or United States nationality on a day other than the first day of the month,
Then… We will pay you for the month after the month you become a United States citizen or United States National and thereafter.

https://secure.ssa.gov/apps10/poms.nsf/lnx/0300204010

If you become a citizen on the first of the month, you get that month's benefit.

[halfnine]

Does that mean you can do it at an Embassy, but not a consular office, when the child is 25? I keep running into a stone wall. Everything says 18. After 18, it looks like you have to be naturalized. The trouble is that every documents talks about a child born outside the US, not an adult born outside the US. Now that may just be language (how is an adult born?), but I keep hitting 18. For example, see Children Born Outside the United States; Applications for Certificate of Citizenship; Final Rule and Notice

We are in agreement as 18 being the limit. I did write anytime but that was just poorly written on my part. What I was trying to infer was that within the ages that my children would be eligible for survivorship benefits they would also be eligible for a US passport. Although, technically that would not be entirely correct either as it looks like a child could get benefits up to 19.

Somehow "A trip to the embassy with the correct documentation and they would be granted citizenship with the documentation following most likely within a month or two" doesn't sound like the US government in action.

I know it doesn't sound like the US government in action, but otherwise one might not be even able to get their kid a passport to leave the country they are currently in. Certainly that would be the case if two US citizen parents had a child abroad. Anyway, from what I've been informed by other expats, typically there is a short interview to verify the parental details and ensure the parent(s) meets the requirements and if everything checks out citizenship for the child is often granted on the spot with consular report of birth and passport arriving a few weeks later.